p2pfan
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Post by p2pfan on Apr 1, 2023 13:42:25 GMT
I agree that is a brilliant breakdown Ace. Thank you for going to all the trouble to lay everything out. It's all about the mathematics behind the situation, the probabilities, and the way you have laid it out makes such a high risk/high reward investment worthwhile. The upside is very significant. Therefore, I can see the advantages of taking the risk to invest in these legal cases. Personally, I am a more cynical fellow than your good self, unfortunately, having had my fingers burned way too many times with people I resolutely trusted, and so I would add other variables etc. to the calculations. For instance: - I wouldn't trust that the probabilities provided (60-65% in this case) are accurate. The advertisers of this promotion have a vested interest in providing a percentage likelihood of success that is overinflated. Just like many property developers and their best-friend P2P platform choose to continue to provide very inaccurate estimation about redemption dates of loans in order to encourage people to lend their money to them, with the majority overrunning (i.e. defaulting) by considerable lengths of time on various platforms, I would personally not trust the 60-65% figure. - the risk of platform failure and therefore total wipe-out of invested capital and likely returns must be factored in. We often hear figures such as nine out of ten small businesses fail within the first five years etc. etc. We all know how many supposedly-successful P2P and similar platforms have suddenly failed and how, despite all the nonsense that lenders will still get their money back in such scenarios, the reality is that in the majority of cases the Administrators and their buddies such as lawyers end up taking all or the majority of redeemed monies for themselves. Etc. etc. |
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firedog
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Post by firedog on Apr 1, 2023 14:34:29 GMT
Another (minor) consideration in favour of investing – if you're already well diversified – is that I understand returns from Axiafunder are treated as capital gains. If other cases do well you're likely to breach the CGT allowance (very likely next year), so I'm assuming a total loss on this would at least serve to offset that 20%?
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Post by Ace on Apr 1, 2023 15:06:53 GMT
Amazing breakdown Ace, I am in 17 cases and consider it worth the gamble, for transparency I also have equity in Axia, Thanks. 17 cases would definitely be an investment rather than a gamble in my book. The chance of an overall loss from 17 cases with the above stats would be 1in 42,831.
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Post by Ace on Apr 1, 2023 15:40:27 GMT
I totally take your points Greenwood2 and p2pfan , particularly with regards to the forecast likelihood of winning. We just don't have stats to determine how accurate the stated chance of winning is. It might be worth noting that it's the senior council's opinion of the chances rather than that of the platform, and that part of the solicitors fees are contingent on the case winning. Taking another look at the odds of an overall loss when investing in 10 such cases with alternative assumptions on the chance of success: As in my previous post, the chance of an overall loss from 10 cases with a 62.5% likelihood of case success is 1 in 1,029. With a 60% likelihood of case success this reduces to 1 in 596. With a 55% likelihood of case success this reduces to 1 in 222. With a 50% likelihood of case success this reduces to 1 in 93. Given the range of possible profits (£6k to £70k) for 10 cases, I'd still be very happy to invest for a 92 in 93 chance of an overall profit. |
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p2pfan
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Post by p2pfan on Apr 1, 2023 15:47:52 GMT
Another (minor) consideration in favour of investing – if you're already well diversified – is that I understand returns from Axiafunder are treated as capital gains. If other cases do well you're likely to breach the CGT allowance (very likely next year), so I'm assuming a total loss on this would at least serve to offset that 20%? Interesting point. I didn't know that returns from Axiafunder are treated as capital gains. Can anyone confirm that is the case please?
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Post by Ace on Apr 1, 2023 16:03:12 GMT
Another (minor) consideration in favour of investing – if you're already well diversified – is that I understand returns from Axiafunder are treated as capital gains. If other cases do well you're likely to breach the CGT allowance (very likely next year), so I'm assuming a total loss on this would at least serve to offset that 20%? Interesting point. I didn't know that returns from Axiafunder are treated as capital gains. Can anyone confirm that is the case please? The returns from some of the early cases were said to be paid as interest, so that's how I declared them on my tax return, with no issues from the tax man. The last 19 cases I've invested in have stated in the Offer Document that returns will most likely be treated as capital gains, with the usual caveats about it not being tax advice etc, and that we should seek advice from an expert if not sure. I'll be declaring these as capital gains unless the platform advises me otherwise.
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billt
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Post by billt on Apr 1, 2023 18:18:36 GMT
Amazing breakdown Ace, I am in 17 cases and consider it worth the gamble, for transparency I also have equity in Axia, Thanks. 17 cases would definitely be an investment rather than a gamble in my book. The chance of an overall loss from 17 cases with the above stats would be 1in 42,831. I still consider Axia and other p2p high risk, I am doing very well after a bad start a few years back, I have considerable sums invested, these decisions are all very personal, in my case getting on in years, my needs are very simple, no young family to support, enjoy the risk taking and potential reward, I still consider it to be a casino but so are the Banks and the stock market.
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Post by overthehill on Apr 13, 2023 17:37:03 GMT
New case available for funding today if you missed the email, a familiar legal claim but with a new law firm. It may be filled by now.
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Greenwood2
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Post by Greenwood2 on May 11, 2023 15:29:17 GMT
New loan available, just happened to see it.
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firedog
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Post by firedog on May 12, 2023 8:05:41 GMT
New loan available, just happened to see it. Thanks - would almost certainly have missed this otherwise. The email promoting this opportunity didn't arrive until 10:04 this morning and within 20 minutes the remainder had been snapped up.
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Post by Ace on May 14, 2023 20:03:24 GMT
Just noticed that 2512 Breach of Employment has a substantial repayment yet there remains a small balance, does this mean that we might get a further payment? Yes. Only 85% of original capital plus profit has been repaid so far. I seem to recall that they needed to hold some back until HMRC were happy. The remaining funds have now been paid for this loan. A 107.8% profit. Well done AF.
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Post by overthehill on May 15, 2023 8:39:48 GMT
Yes. Only 85% of original capital plus profit has been repaid so far. I seem to recall that they needed to hold some back until HMRC were happy. The remaining funds have now been paid for this loan. A 107.8% profit. Well done AF. what was the AER return ?
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Post by Ace on May 15, 2023 8:50:29 GMT
The remaining funds have now been paid for this loan. A 107.8% profit. Well done AF. what was the AER return ? That was the simple profit. The case ran for about 2.5 years and repaid over two installments. I haven't calculated the exact annualised return for me, but the platform has it recorded as 40% IRR (which won't include cash drag).
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morris
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Post by morris on May 21, 2023 16:43:45 GMT
I was interested in the comments about the income/gains from Axia Funder being treated as capital gains. Does that mean that in the current year for example one could receive £6000 gains with no tax liability. If so that is one hell of a incentive (especially as a 40% marginal rate taxpayer).
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Post by Ace on May 21, 2023 20:07:31 GMT
I was interested in the comments about the income/gains from Axia Funder being treated as capital gains. Does that mean that in the current year for example one could receive £6000 gains with no tax liability. If so that is one hell of a incentive (especially as a 40% marginal rate taxpayer). Yes, I believe that is the case.
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